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Brewing Industry Case StudyModule: Strategic Planning ProcessLecturer: Michael ShovelinDate: 04th September 2010Postassignment: Case exampleGlobal Forces and the European brewing industry------------------------------------------------- This assignment is based on the case example Global forces and the European brewing industry andrelates to two questions raised in chapter 2 at the end of the case example (Johnson et al. 2008, p.91) of the book Exploring Corporate Strategy: Text and Cases by Johnson, Scholes and Whittington.1.) Using the data from the case (and any other sources available), carry out for the Europeanbrewing industry (i) a PESTEL analysis and (ii) a five forces analysis. What do you conclude?(i) PESTEL analysisOne tool to analyze the broad macro-environment is the PESTEL analysis. In the PESTEL analysisenvironmental influences are categorized into political, economical, social, technological,environmental and legal aspects. It helps to identify how future trends might influence anorganization and furthermore, to identify the key drivers of change to create scenarios for thepossible future.Political factorsThere is an overall decline of consumption of Beer in Europe as many traditional key markets havebeen made increasingly aware of the social problems associated with alcohol consumption. Factorscould be the active campaign of European governments against drunken driving, binge-drinking andconsequently the long term health and fitness problems.Economic factorsIn the case study there is the talk of the overall decline of European beer consumption, while therewas an increase in emerging markets (e.g. China, Brazil) around the world. This could be because of the government campaigns which caused a shift in sales from the on-trade (beer consumed in pubsor restaurants) to the off-trade (retail/supermarkets). Moreover, the success of Germansupermarkets like Aldi and Lidl with their own private label beers rather than the brewery-brandedbeers has an influence on the European brewing industry. Supermarkets are offering cut price offers.Also the rise of the main purchasing costs like packaging, raw material and energy will have influenceon the beer price e.g. Heineken). Also, the increase of fuel prices which will affect the distributionnetwork, thus transportation costs will increase. Besides, due to the economic crises the breachbetween rich and poor is steadily growing and thus many people cannot afford any more to go outfor dinner or having a beer. Through legal restrictions the demand for alcohol in public places coulddeclines. Furthermore, acquisitions, licensing and strategic alliances have occurred because theleading brewers battle to control the market. The global pressures for consolidation due toovercapacity within the industry are another point that influences this industry. There is a growingtrend towards cross-border mergers and acquisitions. Introduction of higher-priced premiumproducts let sales values raise. If there are natural disasters like previously the fires in Russia this hasan impact on the prices of the raw material.Social/cultural factorsWines have become increasingly popular in the Northern European markets. People may rethinktheir lifestyle and prefer drinking a good wine instead of beer and binge drinking. This could bebecause wine is associated with the upper class and people with a higher income. Moreover, people

2are getting more and more health conscious and therefore, will drink in moderation. Furthermore,there is a rising demand for premium and fruit-flavored beers and also an increasing demand forprivate-label beers. There will also be an increasing acceptance of pan European brands. Besides,the importance of supermarkets in distribution and the growth of own-label products will rise.Technological factorsResearch and development is important in the brewing industry due to the changes in consumertastes. People demand alcohol in different flavors, with low...

...The commitment requires that card issuers provide a 60-day notice period and notify consumers twice before increasing rates on existing debt. | Delay in ability to pass on increases in cost of funds.Will lessen the effectiveness of upward re-pricing. |
5. Simplicity and transparency | The card industry has agreed to work with consumer groups and the government to assess the need for an annual credit card statement that sets out the total cost of running the card for the previous year and specific information on fees and charges incurred. | Better understanding of terms could cause consumers with choice to shift to issuers with lower APRs/fees. |
Adapted from The Path Forward in an Intensified Regulatory Environment By Kim Purcell - http://insights.mastercard.com
All these legislative pressures will mean important sources of revenue will be eliminated while substantial incremental costs will be incurred as credit card providers are facing pressure on margins due to lower revenue, increased costs from regulation and losses due to defaults and card write-offs.
In a positive development fraud losses have continued to decline over the last couple of years, as a range of industry-led initiatives to combat the problem take effect to improve security.
The economic environment
Due to the economic downturn which has initiated lower incomes, slow GDP growth, higher inflation rates, decreased average earnings and increased unemployment...

...example
Global Forces and the European brewingindustry
-------------------------------------------------
This assignment is based on the case example ‘Global forces and the European brewingindustry’ and relates to two questions raised in chapter 2 at the end of the case example (Johnson et al. 2008, p. 91) of the book ‘Exploring Corporate Strategy: Text and Cases’ by Johnson, Scholes and Whittington.
1.) Using the data from the case (and any other sources available), carry out for the European brewingindustry (i) a PESTEL analysis and (ii) a five forces analysis. What do you conclude?
(i) PESTEL analysis
One tool to analyze the broad macro-environment is the PESTEL analysis. In the PESTEL analysis environmental influences are categorized into political, economical, social, technological, environmental and legal aspects. It helps to identify how future trends might influence an organization and furthermore, to identify the key drivers of change to create scenarios for the possible future.
Political factors
There is an overall decline of consumption of Beer in Europe as many traditional key markets have been made increasingly aware of the social problems associated with alcohol consumption. Factors could be the active campaign of...

...non-labour costs), raw material such as barley, and energy. The European packaging industry is highly concentrated, dominated by international companies such as Crown in cans and Owens-Illinois in glass bottles. During 2006, Dutch brewer Heineken complained of an 11 per cent rise in packaging costs.
Global forces and the European brewingindustry
Mike Blee and Richard Whittington
This case is centered on the European brewingindustry and examines how the increasingly competitive pressure of operating within global markets is causing consolidation through acquisitions, alliances and closures within the industry. This has resulted in the growth of the brewers' reliance upon super brands.
In the first decade of the twenty-first century, European brewers faced a surprising paradox. The traditional centre of the beer industry worldwide, and still the largest regional market, Europe, was turning off beer. Beer consumption was falling in the largest markets of Germany and the United Kingdom, while burgeoning in emerging markets around the world. China, with 7 per cent annual growth, had become the largest single market by volume, while Brazilian volumes had overtaken Germany in 2005 (Euromonitor, 2006).
Table 1 details the overall decline of European beer consumption. Decline in traditional key markets is due to several factors. Governments are campaigning strongly...

...According to William D. Wells (2009) advertising is aimed at motivating and affecting consumers' behavior in a way that is beneficial to the company or brand being advertised. Consumers are said to pass through a cognitive and affective phase before adopting and showing certain behavior. The first thing marketers should do in order to make an advertisement effective is to attract people's attention, meaning they have to make consumers process the advertising message consciously. If an advertisement manages to catch consumers' attention, it has an opportunity to motivate and affect their behavior, which is ultimately the goal of advertising. However, the most important factor is considered to be information people expect to get valuable information about a product.
According to Ronald J. Faber (1997) there is a difference between short-term advertising effects and long-term advertising effectiveness. In contrast to effects, effectiveness accumulates over time and affects feelings, attitudes and behaviors. The short-term effects of an advertising campaign can be assessed in time periods ranging from a few minutes to a year, while measuring long-term effectiveness should cover a period of ten years or longer. Evaluation of effectiveness should involve multiple exposures to adverts and multiple executions within campaigns in a complex environment, which includes other marketing activities and competitive actions.
According to Lewis R. Horner...

...Executive Summary
Joseph Schiltz Brewing Company was a United States beer company launched out of Wisconsin in the 19th century. Schiltz was known for making Wisconsin famous because of its original flavor that attracted customers. After the company’s original owner, August Krug, died in 1856 Joseph Schiltz took over managing the company. Over the next two decades the company grew to become one of the biggest breweries in Milwaukee. Joseph Schiltz died in 1875 because a ship he was on sunk coming back from Germany. This is when the company’s demise began. After several new managers were filtered though the company they made a crucial mistake then led to their downfall by cutting cost by replacing some of the malted barley with corn syrup and swapping cheaper hop pellets instead of using fresh hops, and shortening production time by a method they called accelerated batch fermentation. This cut production time from 25 days down to 15 days. If Joseph Schiltz Brewing Company focused more on quality control and customer satisfaction which proved successful for the company until new management did the opposite hoping that their customers would not be able to notice much of a difference they might still be one of the top breweries today.
Table of Content
1.Introduction
-Brief history
-Reason for companies collape
Introduction
This essay will examine why cost cutting led...

...﻿Social Factors
One of the biggest social factors to affect consumers purchasing bedroom furniture has been the recession. The recession struck the UK in 2008, one of its most major impacts have been job losses with both big and small organisations having cut backs on the number of employees . Jobs for most families are a form of stability, relying on the wages from their jobs to pay mortgage or rent and to buy necessities. The unemployment rates in 2008 were up by 1.6% and at the end of 2009 were up by a staggering 2.5%, at the end of 2011 rates were up to 2.5% which has been the highest unemployment rate that the UK has seen in 17years. The Graph below shows unemployment figures from 2007-2011.
Unemployment brings along with it many factors that can affect a person’s health and wellbeing. Families that are used to being in a stable job with a stable income were the ones to feel the sharpest cut backs, along with families that were already on benefits and living off a tight budget. Things like going for family meals, holidays and going to the pub would have to be limited or completely cut out as unemployment hit, which meant that most families would have to change their lifestyle on a whole.
A lifestyle change can have dramatic effects on families and relationships within the families, major cut backs and job loss can put stress on many parents and stress can bring along with it the following side effects, low...

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Question
Citing at least one of each of the PESTELfactors, discuss the implications
of each factors to business startup or operation.
The ever-dynamic nature of the business environment coupled by political, economic, social,
technological, environmental and legal factors (PESTEL) have contributed to a number of
implications to business startup and or operation. Miller (1997) noted that, PESTLE is a strategic
framework for understanding external influences on a business. The central thesis of this essay is
to cite at least one of each of the PESTELfactors, discussing the implications of each of the factors
to business startup or operation.
Firstly, Political factors assess that, the country risk rating will remain high because of the just
ended elections. The new government has indicated its intention to pursue empowerment programs
across all sectors of the economy and the gazetted Indigenization Regulations aimed at attaining
that objective. The timing of the implementation of the regulations when there is no money in the
market to recapitalize companies, or to fund the purchase of equity under the program; the
indiscriminate targeting of foreign investors on a racial criteria irrespective of whether or not such
investors contributed to, or benefited to the impoverishment of Zimbabweans prior to
independence, and the...